Overexpression of XOptx2, a homeodomain-containing transcription factor expressed in the Xenopus embryonic eye field, results in a dramatic increase in eye size. An XOptx2-Engrailed repressor gives a similar phenotype, while an XOptx2-VP16 activator reduces eye size. XOptx2 stimulates bromodeoxyuridine incorporation, and XOptx2-induced eye enlargement is dependent on cellular proliferation. Moreover, retinoblasts transfected with XOptx2 produce clones of cells approximately twice as large as control clones. Pax6, which does not increase eye size alone, acts synergistically with XOptx2. Our results suggest that XOptx2, in combination with other genes expressed in the eye field, is crucially involved in the proliferative state of retinoblasts and thereby the size of the eye.